Apple issues 2011 Sustainability Report

updated 07:20 pm EST, Mon February 14, 2011

by MacNN Staff

Focuses on worker treatment, environmental issues

Apple has published their annual sustainability report, now titled the "2011 Supplier Responsibility Progress Report" that focuses on two areas the company has come under fire for neglecting: worker treatment and environmental stewardship. The company moved in 2010 to implement more extensive audits both inside and outside the factories, and claims significant improvements; Apple also examined the various metals and smelters involved in its production more closely to ensure they are as free as possible of so-called "conflict minerals" (ie, mined or obtained to fuel political strife in Africa and elsewhere).

The report does not shy away from acknowledging that violations of Apple's Supplier Code of Conduct are taking place, but seeks to emphasize what it is doing to combat the issue. Going outside the factory, Apple identified an issue where worker candidates were paying exorbitant fees to recruiters, in effect starting their jobs deeply in debt, a situation Apple refers to in the report as "involuntary labor." The company set a limit on recruitment fees and required suppliers to reimburse workers for overcharges (to the tune of $3.4 million), and also engaged suppliers, government agencies and peer companies to increase awareness of the issue.

Another issue and one that has repeatedly turned up in reports is the presence of underage workers. Because of the nature of assembly work (long hours, often standing, living away from home at factory-supplied dormitories), schools are popular recruitment centers for workers, and most workers at Foxconn facilities are college-aged (the legal age to work in China is 16). "We are working aggressively to prevent the hiring of underage workers," Apple says in its report, noting that its 2010 audits turned up 91 cases of workers who were underage (or were underage at the time they were hired).

"We are equipping facilities with stronger age-verification tools and educating factory managers ... on best practices for working with third-party recruiters," the report says. It also mentions that it found one facility in particular that repeatedly hired underage workers and that management was not committed to fixing the issues, so the company terminated its business with that facility.

This does, however, bring up the thorny issue of enforcement. While Apple may indeed have spent 2010 getting more aggressive in identifying problems, forming corrective action plans and following-up on results, the company's own report admits that if situations have not been resolved within 90 days of an audit, it will only "continue to collaborate with the supplier towards further improvement," since Apple -- like many other companies -- is dependent on suppliers like Foxconn.

Although these issues are frequently portrayed in the media as being Apple-specific, Foxconn and most of its suppliers also work for all the other big names in computers and electronics: HP, Dell, Sony, Microsoft, Motorola and Cisco. Working conditions and salaries in the incredibly large Foxconn factories -- the Shenzen complex of 15 factories is in effect a walled city in its own right, housing up to 450,000 people and featuring its own downtown with shops and restaurants -- often seem shocking to Westerners, but are very much in line with factories in and out of the electronics field.

The company says in its report that it has done many extra audits to determine that there is little if any "forced" overtime, though workers often request overtime anyway. In the context of life in China generally, wages and conditions there are seen as normal.

In its report, Apple says they have developed additional "social responsibility" classes for both workers and management, making everyone aware of the expected Supplier Code of Conduct (PDF), workers' rights and how to communicate with factory management. In addition, the company has started an extra-curricular eduction program called Apple SEED that encourages workers to use some of their paid time to continue their education, such as learning English.

Apple's own report card stresses improvements, but still found only an average of 70 percent compliance on various issues, from keeping accurate payroll hour documentation to correcting ventilating or limiting the use of N-Hexane, a dangerous chemical used as part of the assembly process. Apple terminated their business at several of the 127 facilities audited when problems could not corrected, including one facility where undocumented overtime was prevalent and Apple inspectors were offered bribes in an attempt to hide the issue.

More successful was the company's initiatives to verify that their requirements for certain minerals -- particularly gold, tin and tantalum -- were obtained and smelted using conflict-free suppliers.

The report also contains a specific report concerning the rash of suicides that plagued Foxconn factories early last year, including specific actions taken by Apple executives such as COO Tim Cook and Foxconn executives to examine the root causes of the suicides, and programs undertaken since which have brought the problem under control. The report is available as a downloadable PDF.

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TOTAL_COMMENTS Comments

That's a great step forward. Globalization allow us to get our iDevices cheaper (or allow Apple to have better margins and develop themselves - at least it doesn't end in the pockets of some investors) - and allow workers to have better than average conditions in their respective countries.
Even if not perfect, I'd like to see more companies doing this.

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